Bankhaus Wolbern & Co (AG & Co KG) & Anor v China Construction Bank Corporation, Zhejiang Branch

A non-exclusive English jurisdiction clause will ordinarily prevent a party relying on forum non conveniens grounds that were foreseeable when the agreement was made. A possible foreign asset-preservation order was foreseeable where the relevant legal regime, contractual exposure and asset were apparent. The distinction between giving judgment and enforcing it may mean that foreign sanctions do not make England an inappropriate forum. A case-management stay requires strong reasons, and the likely benefits must clearly outweigh the prejudice caused by delay.

The claimants sought payment under an English-law refund guarantee issued by the defendant Chinese bank in connection with a shipbuilding contract. A Chinese court had frozen the guaranteed sum in proceedings involving the shipbuilder and had warned of sanctions for non-compliance. The defendant applied to set aside permission to serve out, or to stay the proceedings on forum non conveniens or case-management grounds. It also alleged material non-disclosure and defective service of evidence supporting the without-notice application.

1. Forum non conveniens. The non-exclusive jurisdiction clause ordinarily precluded reliance on matters foreseeable when the guarantee was executed. The possibility of a Chinese preservation order was foreseeable because the relevant law already existed, the order’s purpose was apparent, the underlying contract exposed the buyer to claims, and the payment right was an asset capable of being frozen.
2. It was unnecessary to decide whether sufficiently strong considerations of justice could overcome foreseeability. No stay was justified in any event. England was the better forum for determining rights under an English-law guarantee, including any foreign illegality or public policy issue. Giving judgment was distinct from enforcing it. Judgment would be for money, not a coercive order, and would not itself require breach of the Chinese order. Enforcement in China was inconceivable while the order remained in force, and enforcement elsewhere was unlikely to attract Chinese sanctions. The defendant could apply for a stay of execution if necessary.
3. Case-management stay. The court’s inherent power to stay proceedings required strong reasons, with benefits clearly outweighing the prejudice to the opposing party. Those requirements were not met. Continuing the claim would not inevitably cause breach of the Chinese order, and the court should determine the parties’ rights, including enforceability.
4. Non-disclosure and service. The omissions in the supporting evidence did not justify setting aside the permission order because the existence, dates and conflict created by the preservation order had been disclosed. However, failure to serve the evidence and translation in accordance with the applicable rules and convention, together with the evidential omissions, warranted an appropriate costs order.
5. The defendant’s applications to set aside the permission order and for jurisdictional or case-management stays were refused.